Association for Progressive Communications (APC)
FINANCIAL SYSTEMS, POLICIES, AND PROCEDURES MANUAL
FIFTH EDITION
April 2008
CONTENTS
1 Purpose of this manual 3
2 Duties regarding APC financial matters 3
2.1 Duties of the board of directors and its treasurer 3
2.2 Duties of the executive director 3
2.3 Duties of the finance manager 3
3 New financial systems 4
3.1 Revenue 4
3.1.1 Grants and donations 4
3.1.2 Dues 4
3.1.3 Other revenue 4
3.2 Building a reserve fund 4
3.3 Expenditure 5
3.3.1 Contractors/suppliers and payment procedures 5
3.3.2 Bank of the West (BOW) payment procedure 5
3.3.3 Documentation 5
3.3.4 Monthly cashbook procedure 5
3.3.5 Automated financial reports 5
4 Bank of the West (BOW) online banking service 6
5 Staff salaries, benefits and office expenses 6
6 Assets 6
7 Bank accounts and credit cards 6
7.1 Cheque/current accounts 6
8 Credit card reimbursement 7
9 US nonprofit status and taxation 7
10 Independent accountants’ audit 7
11 Financial records 8
12 Financial reports and budgets 8
13 Insurance 8
13.1 Computers and related office equipment 8
13.2 Travel policy 8
Appendix 1: APC travel policy and procedures 9
Appendix 2: Requesting a payment via the APC online finance system 11
1 Purpose of this manual
The purpose of this document is to record the procedures to be followed for all routine financial activities involving the management, disbursement and receipt of funds for and on behalf of the APC. It is to be updated on a regular basis to include new and updated policies and procedures.
2 Duties regarding APC financial matters
2.1 Duties of the board of directors and its treasurer
The APC bylaws outline the duties of the board of directors[1] regarding APC financial matters. This document outlines the practical day-to-day actions that are necessary for ensuring that the bylaws are adhered to.
Sections 2 to 7 of the bylaws are also intended as a guide for staff. Article VII, Section 10 states that the “Treasurer shall supervise the charge and custody of all funds of this organisation, the deposit of such funds in the manner prescribed by the Board of Directors, and the keeping and maintaining of adequate and correct accounts of this organisation’s properties and business transactions, shall render reports and accountings as required, and shall have such other powers and duties as may be prescribed by the Board of Directors or these Bylaws.”
2.2 Duties of the executive director
The executive director (ED) has charge and custody of, and is responsible for, all funds and securities of APC, and deposits all such funds in the name of APC in such banks, trust companies, or other depositories as shall be selected by the board.
Specific responsibilities of the ED[2] include:
· Authorising payments/expenditures above USD 5,000[3]
· Approving monthly financial reports
· Signing off cashbooks and bank reconciliations
· Approving that content and value of contracts correspond with relevant project budgets.
2.3 Duties of the finance manager
The finance manager (FM) is responsible for:
· Establishing and maintaining sound financial procedures, policies and systems for APC
· Accurate and timely financial planning and ongoing monitoring of plans and budgets
· Ensuring that APC finances are effectively controlled and that reports and records are maintained and made accessible
Ensuring that the annual audit takes place
· Collecting membership dues, collect other payments due to APC
· Receiving and giving receipts for monies due and payable to APC from any source whatsoever
· Paying contractors, salaries and expense reimbursements, and taking proper vouchers for such disbursements
· Ensuring that APC meets statuatory requirements related to APC’s legal status.
3 New financial systems
APC’s financial systems are located at a remote server hosted by CPC Plus Solutions[4] in Johannesburg, South Africa. CPC is responsible for daily back-ups of the system. APC’s accounting package is called Pastel Evolution and is accessible via the remote server. Detailed procedures and instructions for the online payment request system, the accounting system and the online automated financial reports will be written during 2008.
3.1 Revenue
3.1.1 Grants and donations
Grant income is receipted as soon as it has been received. The name of the grantmaker together with the date of receipt is recorded in the relevant account in the general ledger. Deferred income comprises grants received in advance of the period to which they relate, is excluded from income, and is accounted for as a current liability. When lump sums from grants are allocated to APC projects or members, it is the responsibility of the project coordinator to ensure that records of expenditure and income for the project are maintained.
Records should be kept as stated in section 4 of this manual. Original documentation such as invoices and receipts need to be kept for a period of five years, and such records should be sent to the FM as requested. It is the responsibility of the person designated in charge of the project to report on the expenditure as stipulated in contractual agreements between APC and the funder, as well as contracts between APC and the project.
3.1.2 Dues
Members should be invoiced for their APC membership fees on an annual basis, and invoices should be sent to members by no later than 31 March of the financial year. Dues should be collected in full no later than 31 May. Members who have not paid their dues should be sent reminders, in a statement format, on a monthly basis until payment has been received. APC’s policy is to deduct any outstanding dues from payments to members.
3.1.3 Other revenue
Other revenue (e.g. consulting income) should be invoiced for, stating details clearly and should be paid into the APC reserve fund. Detailed records of all earned revenue should be kept.
3.2 Building a reserve fund
APC aims to build a financial reserve towards ensuring greater long-term financial security.
Sources of income to be channelled into the reserve fund:
· Income from external and internal consulting
· Savings on staff expenses
· Under certain circumstances, savings on project expenses
· Registration fees to be paid by all participants at APC workshops and meetings.
APC staff members are to disclose information on income earned from external consulting if consulting is under-taken during APC time.
3.3 Expenditure
3.3.1 Contractors/suppliers and payment procedures
In mid 2007 APC started using a web based, online, payment request system which is linked to the accounting system. Staff team use the system to request payments, the workflow and instructions for completing a payment request is detailed in the Requesting a Payment via the APC online Finance System document. Once the payment is approved the finance team makes payment either by wire or occasionally by cheque.
3.3.2 Bank of the West (BOW) payment procedure
Two authorised persons are required to make online payments at BOW. Currently, the finance assistant (FA), the ED and the FM are authorized for make and approve wires payments. FA prepares wire payment once payment has been authorised, and requests FM to ‘approve and release wire’ payment.
After FM releases payment the wire details are added to the online payment system, the payment system sends an automatic payment advice to the payee and the payment requestor.
3.3.3 Documentation
For each payment, the FA should print the following for the records:
· Payment form which also reflects approvals and payment references such as wire or cheque numbers
· Supporting documentation such as invoices and receipts which are to be marked “paid.”
The above records are to be compiled and sent to the FM on a quarterly basis.
3.3.4 Monthly cashbook procedure
The FA compiles payment information from the online payment request system and exports it to the accounting system on a monthly basis. He or she also gathers information about incoming payments to APC, and send this together with the monthly bank statements to the financial consultant. The financial consultant reconciles the data against the bank statements and then posts the data to the ledger. Cashbooks and bank reconciliations are available on the accounting system for review at any time. The cashbook and bank reconciliation, together with any journals are to be printed and filed for review and signature of the ED and FM on a monthly basis.
3.3.5 Automated financial reports
As soon as the month-end accounting procedures, such as bank reconciliations, are complete, the financial consultant should “run” the monthly financial reports on the Business Intelligence Centre (BIC) section of Pastel Evolution. These reports are then to be saved on the shared drive of the finance server. The reports are to be made available (in spreadsheet format) on the online payment request system. The reports are to be available to the board, the ED, programme managers and relevant project managers.
4 Bank of the West (BOW) online banking service
In May 2003, APC began to use BOW’s online banking service, called Webdirect, the service allows authorised APC staff to process payments by wire.
Once payment requests have been approved, the FA prepares wire payments using a secure login and password, and requests the FM or another authorised user to approve and release wire payment. The FM approves and releases wire and attaches the wire report to the online payment report records.
The online wire transfers at BOW can only be made if one authorised person prepares the payment, and another/second authorised person approves and releases the wire. The person releasing the wire is not allowed to amend the payment details in any way; if the person releasing the payment does have to amend the wire, this same person may not release the payment. The amended payment then needs to be authorised by both the FM and the FA.
A note on cheque payments: All cheques for payments above USD 2,500 are to be signed by both signatories; payments under USD 2,500 may be signed by one signatory only.
5 Staff salaries, benefits and office expenses
All staff should use the online payment request system on a monthly basis for claims by at least the 10th of each month. The FA is to prepare a payroll that includes monthly salary (this should include the monthly updated post-adjustment factor figures) and office expenses.
6 Assets
APC depreciates capital expenditures greater than US200. Computers and equipment are depreciated over 36 months. Furniture is depreciated over 60 months. An assets register should be maintained and updated on a quarterly basis when there are assets.
7 Bank accounts and credit cards
7.1 Cheque/current accounts
APC currently has four chequing accounts at BOW in San Francisco. New accounts are only opened if a funder/project requires it. When cashflow allows, special “certificate of deposit” (CD) accounts are opened in order to accrue interest, and to build reserves. Two CD accounts were maintained in 2007.
The details of the primary/main checking account are:
BANK OF THE WEST, 295 Bush St. San Francisco CA 94104
Contact: Daniel Tondeau, Client Services Manager - AVP
Northern California Division Private Banking Office
Tel: (415) 765-4864, Fax: (415) 837-1404
NC-MON-03-E
www.bankofthewest.com
Aba number: 121100782
SWIFT code: BWSTUS66
APC checking account number: 042 000 281
8 Credit card reimbursement
The process for reimbursement for credit card purchases is as follows:
· The cardholder/employee receives the bill from the credit card company
· The cardholder/employee completes an expense claim form for the credit card charge(s)
· The cardholder/employee submits the claim for to the FM by the 10th of the month
· The FM reviews and prepares the form, filling in the correct projects and accounts to which the expense(s) should be charged (according to the chart of accounts)
· The FM submits the form to the ED for approval
· Upon receipt of approval, the cardholder/employee makes payment to the credit card company
· After making payment, the cardholder/employee sends the FM the cheque number and bill together with all vouchers.
Note: Currently there are no APC credit cards.
9 US nonprofit status and taxation
APC is required to pay employment taxes for its US employees and file quarterly payroll reports, and is required to complete and submit annual w-2 forms to each employee, by 31 January of the following year.
APC is also required to complete and submit miscellaneous other tax documents to certain people based on payments to them. Form 1099-miscellaneous, is to be issued for any US citizen and/or US resident who is paid a fee by APC.
APC is also required to file annual returns to the US government and the state of California by 15 May of the following year for each year.
In order to maintain its nonprofit status, APC should submit periodic assessments as and when required by the US Internal Revenue Service. These are all stated in the legal organization documents.
It is the personal responsibility of all and any contractors (including staff members) of the APC residing in countries other than the US to submit tax information to the relevant authorities in the country of their residence.
It is the responsibility of the FM to ensure that all the forms and documents (as required by the various state authorities) are completed and submitted within deadline.
10 Independent accountants’ audit
APC is required to engage independent auditors to assess and report on the financial standing of the APC on an annual basis.
It is the responsibility of the FM to present updated and accurate financial records to the independent auditors within three months of the end of the financial year (31 December). The independent auditors’ report is to be completed and presented no later than 30 June of the following year.
11 Financial records
A cashbook should be maintained in order to keep accurate records of all revenue and expenditures. The cashbook should be reconciled to the APC bank statements on a monthly basis, and any discrepancies should be reported to the ED.
12 Financial reports and budgets
It is the responsibility of the FM to submit financial reports, consisting of at least an income statement and a balance sheet, to the ED and board on a monthly basis. Council should approve the APC Management Systems budget on at least an annual basis.